Cowen v. Pressprich

Brief Fact Summary.

Seller made an agreement to sell and deliver an Oregon Short Line Railroad bond to Buyers. Seller obtained an incorrect bond, thinking it was the correct bond, to Buyer by accident. Seller’s messenger delivered the bond, leaving it in Buyer’s office. Buyer’s employee realized the bond was incorrect and gave the bond to an unidentified messenger, thinking he was Seller’s messenger. The unidentified messenger did not return the bond to Seller. Seller brought suit against Buyers for conversion. The lower court held in Seller’s favor. The New York Supreme Court Appellate terms affirmed the lower court’s judgment, regarding the $25 fee, but reversed the remaining of lower court’s decision, based on the lower court’s dissenting opinion by Justice Lehman in the case at hand.

Synopsis of Rule of Law.

An involuntary bailee does not have a duty to return goods that were delivered by mistake, unless the bailee engaged in a wrongful act or created the bailment contract.

Facts.

Stock-exchange brokers (Sellers) made an agreement to sell and deliver an Oregon Short Line Railroad bond to another group of brokers (Buyers). A third party gave Sellers an Oregon & California Railroad bond by accident. Sellers, unaware of the accident,had a messenger deliver the bond to Buyers’ office. In the office’s delivery room, there was a slot and a closed window. Adjacent to that slot and window, were Buyers’ employees inside a room. Once the Seller’s messenger placed the bond in the slot, the messenger immediately left the building. One of the buyers’ employees noticed that the bond was delivered by accident. Thereafter, the Buyer’s employee opened the window and gave the bond to an unidentified messenger, thinking it was Seller’s messenger. At that moment, the unidentified messenger took possession of the bond and did not returned it to Sellers. Sellers brought suit against Buyers for conversion alleging Buyers had an absolute duty to redeliver the bond to Seller. The lower court ruled in Sellers’ favor, and the New York Supreme Court Appellate Term affirmed the judgment with regards to the $25 in costs. However, the New York Supreme Court Appellate Division reversed the lower court, based on the lower court’s dissenting opinion of Justice Lehman in Cowen.

Issue.

Whether an involuntary bailee has a duty to return goods that were delivered by mistake, unless the bailee engaged in a wrongful act or created the bailment contract.

Held.

No, an involuntary bailee does not have a duty to return goods that were delivered by mistake, unless the bailee engaged in a wrongful act or created the bailment contract.

Discussion.

An involuntary bailee does not have a duty to return goods that were delivered by mistake, unless the bailee engaged in a wrongful act or created the bailment contract. Here,Buyers did not have an affirmative obligation to receive or care for the bond. Instead, the delivery-room slot, were the bond was delivered, was a location and an invitation for Seller to deliver only the goods that the buyers were obligated to receive. Buyers was not obligated to receive the bond that Seller’s messenger delivered nor did Buyers accept the bond. Buyers’ liability must be founded upon a contractual agreement or a wrongful act. A bailment contract, express or implied, is created when an involuntary bailee engages in an “overt act” of interference with a good. In this case, Buyers’ attempt to rid themselves of the bond is not deemed to be an “overt act.” Also, the buyers’ employee reasonably and properly tried to return the bond, thinking that the seller’s messenger was still present in the delivery room. Furthermore,even if the court deems negligence to be an issue, Buyers would still be free of liability because Buyer’s employee was acting in good faith when he handed the bond to the messenger, Buyer was not even obligated to return the bond, the return was for Seller’s benefit, and it was Seller’s mistake that created the need for redelivery. Therefore, Sellers’ complaint is dismissed, with costs.